CASE STUDY
SUMMARY: MARKETING EXCELLENCE CATERPILLAR
The steam tractors of the 1890s and early 1900s were extremely heavy, sometimes weighing 1,000 pounds (450 kg) per horsepower, and often sank into the rich, soft earth of the San Joaquin Valley Delta farmland surrounding Stockton, California. Benjamin Holt attempted to fix the problem by increasing the size and width of the wheels up to 7.5 feet (2.3 m) tall and 6 feet (1.8 m) wide, producing a tractor 46 feet (14 m) wide. But this also made the tractors increasingly complex, expensive and difficult to maintain. Caterpillar was founded in 1925 when two California based tractor companies merged. The name “Caterpillar” Company photographer Charles Clements was reported to have observed that the tractor crawled like a Caterpillar, and Holt seized on the metaphor. "Caterpillar it is. That's the name for it!" Some sources, though, attribute this name to British soldiers in July 1907. Two years later Holt sold his first steam-powered tractor crawlers for US$5,500, about US$128,000 today. Each side featured a track frame measured 30 inches (760 mm) high by 42 inches (1,100 mm) wide and was 9 feet (2.7 m) long. The tracks were 3 inches (76 mm) by 4 inches (100 mm) redwood slats.
Holt received the first patent for a practical continuous track for use with a tractor on December 7, 1907 for his improved "Traction Engine" ("improvement in vehicles and especially of the traction engine class; and included endless traveling platform supports upon which the engine is carried"). Holt's track-type tractors played a support role in World War I. Even before the U.S. formally entered WWI, Holt had shipped 1,200 tractors to England, France and Russia for agricultural purposes. These governments, however, sent the tractors directly to the battlefront where the military put them to work hauling artillery and supplies. When World War I broke out, the British War Office ordered a Holt tractor and put it through trials at Aldershot. The War Office was suitably impressed and chose it as a gun-tractor. Over the next four years, the Holt tractor became a major artillery tractor, mainly used to haul medium guns like the 6-inch howitzer, the 60-pounder, and later the 9.2-inch howitzer.
Holt tractors were also the inspiration for the development of the British tank, which profoundly altered ground warfare tactics. Major Ernest Swinton, sent to France as an army war correspondent, very soon saw the potential of a track-laying tractor. Although the British later chose an English firm to build its first tanks, the Holt tractor became "one of the most important military vehicles of all time. Holt tractors had become well known during World War I. Military contracts formed the major part of the company's production. When the war ended, Holt's planned expansion to meet the military's needs was abruptly terminated. The heavy-duty tractors needed by the military were unsuitable for farmers. The company's situation worsened when artillery tractors were returned from Europe, depressing prices for new equipment and Holt's unsold inventory of military tractors. The company struggled with the transition from wartime boom to peacetime bust. To keep the company afloat, they borrowed heavily.
C. L. Best Gas Tractor Company, formed by Clarence Leo Best in 1910 and Holt's primary competitor, had during the war received government support enabling it to supply farmers with the smaller agricultural tractors they needed. As a result, Best had gained a considerable market advantage over Holt by war's end. Best Gas Tractor Company also assumed considerable debt to allow it to continue expansion, especially production of its new Best Model 60 "Tracklayer".
Both companies were adversely impacted by the transition from a wartime to a peacetime economy, which contributed to a nationwide depression, further inhibiting sales. On December 5, 1920, 71-year-old Benjamin Holt died after a month-long illness.
Caterpillar built its first Russian facility in the town of Tosno, located near St. Petersburg, Russia. It was completed in 16 months and occupied in November 1999. It had the first electrical substation built in the Leningrad Oblast since the Communist government was dissolved on December 26, 1991. The facility was built under harsh winter conditions, where the temperature was below −13°F (−25°C). The facility construction was managed by the Lemminkäinen Group located in Helsinki, Finland.
The $125M Caterpillar Suzhou, People's Republic of China facility, manufactures medium wheel loaders and motor graders, primarily for the Asian market. The first machine is scheduled for production in March 2009. URS Ausino, in San Francisco, California, manages facility construction.
Caterpillar has manufactured in Brazil since 1960. In 2010 the company announced plans to further expand production of backhoe and small wheel loaders with a new factory.
STATEMENT OF THE PROBLEM: Caterpillar Inc. as the Industries most leader in earth moving machinery, how does the company be competitive to its competitors.
STRENGTHS:
As the world’s leading manufacturer of earth moving machinery the company gains the trust and maintains the loyalty of the people, there is a big Impact if you are the first in the market to produce new product because mostly you do not have competitors at first but of course it is a market industry there will always go beyond your system it is up to the company to be driven enough to compete and maintain its legacy.
WEAKNESS:
In July 1999, Caterpillar and five other diesel engine manufacturers signed a consent decree with the Justice Department and the State of California, after governmental investigations revealed violations of the Clean Air Act. The violation involves over a million diesel engines sold with "defeat devices," devices that regulated emissions during pre-sale tests, but that could be disabled in favor of better performance during subsequent highway driving. Consequently, these engines "emit up to triple the permissible level of smog-forming nitrogen oxides (NOx). In 1998 alone, these violating vehicles emitted 1.3 million tons of additional NOx — an amount equal to the emissions of 65 million cars." For this reason, Caterpillar was named the "Clean Air Villain of the Month" for August 2000 by the Clean Air Trust. The consent decree provided that $83 million be paid in civil penalties and deteRmined new deadlines for meeting emissions standards. Caterpillar, however, was successful in lobbying for an extension of deadlines they considered too severe. Even so, in October 2002, Caterpillar – the only diesel engine company (of those that signed decrees) to fail to meet the new emissions standards deadline – was forced to pay $128 million in per-engine non-conformance penalties. Nobody is perfect in everything but the main purpose of this violation it gives the company to innovate their system and use eco friendly solution, learn from previous mistake can be a source of a better future.
OPPORTUNITIES:
Instead of failing because of affecting the cleanliness of the air these problem did not stop the company on its legacy instead they use it as a tool to produce new machinery that can contrast the harmful effects to our environment.
THREATS:
Like other Company, competitors cannot be driven out of the league it is part of the cycle it is the system of the market. It is up to the skills of a company on how they handle situations to avoid the company to loss its funds or income and worst to close down.
ALTERNATIVE COURSE OF ACTION #1 * To Produce High-End Machinery
ADVANTAGE: This can be a solution to some company because of the functionality that they need.
DISADVANTAGE: Considering the costs of production the technology used to produce the machine and the research needs to be done to pursue this, also like before the company need to consider the environment to avoid illegal actions pertaining the environment.
ALTERNATIVE COURSE OF ACTION #2 * To enable economic growth through infrastructure and energy development and to provide solutions that protects people and preserves the planet.

ADVANTAGE: Not all company has this kind of view, we are lucky that the company envision a world that we can breathe clean air and green environment.
DISADVANTAGE: Maintaining it will be very difficult specially when you want to become competitive on the market but likewise this can still manifest to the company to be unique on its own.